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What we know about M7D?

Sonia Plaza June 12, 2013

The Evidence Base for October’s High Level Dialogue

di·as·po·ra noun \dī-ˈas-p(ə-)rə, dē-\

the movement, migration, or scattering of a people away from an established or ancestral homeland

Key Messages

1. Diaspora contributions are more than remittances.

2. There are significant untapped economic benefits.

3. Governments need to do more.

Outline

1. Mapping of the diaspora

2. Benefits of the diaspora :A. Remittance inflow, support for poverty alleviation &

philanthropic donationsB. Support for trade, technology and knowledge transferC. Investment by the diaspora

3. Governments’ programs for engaging diaspora in sending and receiving countries

4. Policy recommendations

African Union Definition of Diaspora:

"consisting of people of African citizenship and nationality and who are willing to contribute to the development of the continent and the building of the African Union”

Diaspora Size: 2010Millions

Ancestry in the USA: 2010Million

Overseas Indians Living Abroad 2012

Overseas Indians: 21,909875NRI: 10,037,761PIO: 11,872,114

Ethiopia: Second Largest African migrants group in USA

211

140 133

111 110

85 84 8167

40

thousands

Benefits of engaging with the diaspora

A. Support for poverty alleviation and philanthropy

B. Support for trade, technology, and knowledge transfer

C. Investment by the diasporaD. Potential for return

Remittances to developing countries to reach $401 bn in 2012

Source: Development Prospects Group, World Bank

Philanthropic Activities by the African diaspora associations: Denmark case study

Collective remittances

27 (22%)

Larger programs4 (3%)

Sending used equipment41 (34%)

Sending new equipment

6 (5%)

Information / education20 (16%)

School projects13 (11%)

Other small-scale projects9 (7%)

Health clinic projects3 (2%)

Sending used equipment

Sending new or larger equipment(e.g. machines)

Donations / collective remittances

Education / capacity building /informational campaigns

School projects / orphanages /activity centers

Health clinics / hospital projects

Other small-scale projects (wells/ farming / micro-credit etc.)

Larger programs (education /environment / infrastructure)

Diaspora Organizations in USA

Organization Legal Identity

Objectives Funding Constraints

Ethiopian Orthodox Church, DC

Non-profit Promote education

Fund raising, donations

Security during disaster relief, restrictions on imports

Wegene Ethiopia Foundation, VA

Non-profit Strengthening family structure

Membership, donations, collaborations

Funding, information, legal system, taxes

Coalition for Ethiopia women for mutual support, NY

Non-profit Female empowerment

Membership, donations, New York assoc. for New Americans

Return migration, discrimination

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Main findings of diaspora assoc.

In USA, associations still are self financed while in Denmark, external funding plays an important role

Opportunities in host country are important

Difficult for associations to access funds (e.g., SBA, or other European Funds)

Strong participation of diaspora for rebuilding post conflict and fragile states independently of place (within Africa or outside Africa)

Main findings of diaspora assoc. Level of contact with government varies by

country:– Liberia: strong connections with the

associations– Little contact or nil contact with governmental

institutions (Nigeria, Kenya, Ethiopia). They work directly with schools and hospitals

Dual citizenship does not affect contributions

Support for Trade, technology and knowledge transfer

Source of demand for home country’s exports and linkages

A source and facilitator of research and innovation

Due to their cultural and linguistic abilities, they are better able to adapt, establish connections and reduce asymmetric information

Migration and Trade Go Hand in Hand: African and OECD Countries

0

4

8

12

16

20

0 2 4 6 8 10 12 14 16

Log o

f tot

al tr

ade

Log of migrant stock

Bilateral trade (2007) and migrant population (2010) between OECD and AfricaEach dot represents a migrant corridor (Kenya-UK, Morocco-France, etc.)

Technology and knowledge transfers

Licensing agreements

Direct investment in local firms as a joint venture

Knowledge spillovers (managerial positions)

Networks of scientists and professionals

Virtual return, extended visits or electronic communications

Return to permanent employment

Using the Diaspora to Supplement Local Capacity

Global exchange of knowledge

Networks provide:– A critical mass of professional peer review not

available at the national level– An effective mechanism for keeping in touch with

the frontier of knowledge– A cost effective means for specialized training and

skills formation Mentoring, internships, etc

Lessons from successful diaspora networks

Networks bring together people with strong motivation

Member play both roles:– Implementing projects in the home country; and– Serving as bridges and antennae for the

development of projects in the home country

Migration as a driver of growth

ChileGlobal

China: How to foster innovation?

Research collaborations

Provide scientific input, key techniques, reagents to facilitate research projects, etc;

Help establishing research institute, centers,& laboratories that meet the US standards;

Joint laboratories with joint grants;

Joint biotech companies and joint fund raising activities

The Latin Scientific Diaspora

Not interested in “moving back”to their countries of origin

Most countries have failed in attracting them back

Not well organized

Very interested in helping their country of origin and or other Latin countries

LatIPnet has created own network of diaspora individuals

Scientists, directors, professionals, investors, lawyers

LatIPNet Mission and Charter

– To build value from knowledge in Latin countries by Helping to build new global businesses using

technology developed in Latin America and Spain Helping to globalize tech business from Latin countries

by bringing them into the US market Enhancing the collaboration university-industry &

building partnerships global players to bring value from R&D

– To educate Latin innovation agents on the value of IP stressing commercialization and new venture generation

Examples of LatImPetu Companies

The Problem:• Boom of tequila industry triggered overgrowth of agave plants through Mexico• Agave grown outside the zones under “Designation of Origin” by the tequila industry could not be sold• Price of agave plummeted• Hundreds of agave farmers are going bankrupt while their agave plants are waisting in the fields. Losses are in the billions of dollars

The Solution:Production of new, valuable, and global products (other than tequila) from the agave (i.e. natural sweeteners and food additives)

Brain Drain, Brain Gain or Brain Circulation?

The dilemma of highly skilled migration

The special case of education and health professionals

Canada: Mitigate the brain drain by investing in diaspora-led development projects

High-skilled migration is larger in low-income countries

Solution: train more people; leverage the diasporas

High-skilled emigration (of tertiary educated) from Small States

Emigration rate of tertiary-educated population

Source: Migration and Remittances Factbook (2011).

But migration can augment skill levels in developing countries through brain gain, skill and technology transfers, and return migration

High-skilled emigration (of tertiary educated) from Small States

Emigration rate of tertiary-educated population

Source: Migration and Remittances Factbook (2011).

But migration can augment skill levels in developing countries through brain gain, skill and technology transfers, and return migration

Virtual return and short term return Virtual participation distance teaching, e-learning , joint

research projects, peer reviewer

Remote resource mobilization (donation of books, sending computer, providing medical equipment)

Examples of facilitating conditions for returnees to the Universities (flexibility in appointments, recognition of degrees, etc)

Information and identification of short-term return assignments

Access and acquisition of bandwidth for education and research purposes.

Investments in business and housing

The diaspora is more willing to take risks in its own country but…

They will need:

Conducive business environment

Sound and transparent financial sector

Rapid and efficient court systems

Safe working environment

Diaspora has savings that can be moblized

Diaspora resources are determined by the net wealth of members.

Types– Diaspora bonds (India, Israel, Kenya,Ethiopia)– Diaspora funds (Liberia is considering it)

Several countries show that diasporas do invest (e.g., China, Ethiopia, Kenya, India, Israel, Ireland)

The wealth of the diaspora can be mobilized through diaspora bonds

Diaspora size(millions)

Estimated savings($ billions, 2009)

Developing countries 161.5 397.5

East Asia & Pacific 21.7 83.9

Europe & Central Asia 43.0 72.9

Latin America & Caribbean 30.2 116.0

Middle East & North Africa 18.0 41.2

Sub-Saharan Africa 21.8 30.4

South Asia 26.7 53.2

Source: Ratha and Mohapatra 2011.

The World Bank has set up a Task Force on Diaspora Bonds

An important step is to know the profile of the diaspora

Mapping diaspora Profile

Mapping diaspora organizations and networks

Mapping existing obstacles to diaspora Investments (e.g. dual citizenship, cost of visa, etc)

Boosting the development impact of the diaspora: selected policies

Objective Measure

Mobilizing the diaspora Dual citizenship Virtual/temporary programsGovernment invitations

Stimulating ties with overseas communities

Diaspora bondsForeign currency accounts (Bangladesh)Premium interest rate accountsInvestment packages to overseas (China)Establishing special office (Mexico)Linking cooperatives/banks with banks in developed countriesIncreasing domestic bank presence in transferring remittances Saving mobilization: social security/housing/ microfinance programs

Stimulating investment Outreach through MFI infrastructureOutreach through migrant’s service bureausTax breaks on imported capital goodsSME schemes (financial, infrastructure or innovative)Training programs

Outreach to migrant collectives/ Hometown associations (HTAs)

Matched fundingPublic-private venturesCompetitive bidding for development projects

Improving attractiveness of receiving countries to diaspora

Research funding and monetary incentives (Ireland)Attractive salary packages, multiple-entry visasEnabling migrants to spend on their relatives’ behalf

Government policies to maximize the benefits of the diaspora

• Policies in sending countries• Dual/Multiple citizenship/Voting rights• Conducive business environment/trade/tec• Measures to quantify their diaspora• Develop financial instruments to tap to the diaspora• Portability of pension funds• Management of Migration

• Policies in receiving countries• Acceptance of dual citizenship• Agreement with other countries (social security

portability, labor, taxation)• Protection of immigrants

Examples of Initiatives in Africa (World Bank)

Regional Initiative in Science and Education (RISE) – Carnegie-IAS– Origin: Vice Chancellors at Leaders’ Forum in

2006 concurred that staff development was their greatest need

– Objective: Prepare PhD-Level scientists and engineers in SSA through university research and training networks

– Diaspora role: giving short courses, hosting RISE students at labs abroad, engaging in collaborative research

World Bank Initiatives

Program of engagement with the Africa Diaspora– University of Ghana, Faculty of Social Science– Ethiopia, Scholl of Medicine,

Telemedicine Unit, Connectivity Develop joint curriculum Thesis supervision, Mayo Clinic

– Support for diaspora initiatives (Kenya, Ethiopia, Uganda, Mali, Tanzania, Liberia)

Focus groups and diaspora surveys Jamaica Comoros

Diaspora Bonds

AAU Issues of Accreditation

ICT (bandwith)

Sensitizing faculty that it will be mutual collaboration (opportunities for joint research)

Institutional Affiliation

Providing back home opportunities

Communication and Access to Information

Governments have set up diverse initiatives to improve

the image and knowledge of the diaspora by the

members of the diaspora themselves as well as the

general public.

Results:Most embassies communicate via email notifications,

websites, and through diaspora organizations.All embassies have a website, but some have more

detailed information.

Challenges

No government has complete mapping of diaspora; data mainly based on those who register with embassy

Very little involvement with investment, trade & technology transfer, few embassy staff dedicated to this: At most, facilitate forums, or provide matching

Little coordination at the embassy/consular level when dealing with diaspora

Some instances of government mistrust by diaspora

Policy recommendations for governments

Data• Improve data collection on diaspora

Improving diaspora outreach• Embassies/foreign service departments need to provide more

investment, trade, skills & technology transfer services, as well as more staff training in these areas

• Better coordination among different departments within the embassies and governments

Stimulating Investment• Innovative ways of developing financing instruments,

harnessing diaspora resources, etc

Key Messages

1. Diaspora contributions are more than remittances.

2. There are significant untapped economic benefits.

3. Governments need to do more.

Thank you

splaza@worldbank.org

www.knomad.org

www.worldbank.org/migration